European e-commerce scale-up Dwarfs attracts EUR30m in debt financing

E-commerce scale-up Dwarfs has reached an agreement with European Special Situations investor North Wall Capital to provide EUR30 million debt financing from the firm’s dedicated e-commerce lending strategy. 

The total funding will be used to finance new acquisitions, including the immediate completion of the acquisition of four online stores in the lifestyle and home furnishing sectors. 
 
Capitalising on strong momentum in the e-commerce market, Dwarfs is experiencing rapid growth and, in addition to the €30 million acquisition credit facility secured from North Wall Capital, the Company is looking to secure further additional equity capital from investors over the course of September 2021. One of the aims of this funding round is to help fund a number of additional already-identified significant acquisitions that, if successfully completed, will triple Dwarfs’ revenue to around EUR35 million. Dwarfs is also in the process of raising a larger Series B funding round in addition to the ongoing capital raise, consisting of both equity and debt, by the end of 2021 to further drive the Company’s expansion. 
 
With the availability of the EUR30 million in financing, Dwarfs will complete the already signed agreements to acquire four online stores: Slaapkalm(weighted blankets; founded 2019, operating in NL), Calmzy (weighted blankets and bedroom accessories, founded 2019, operating in NL), Litollo(pregnancy pillows, founded 2019, operating in NL) and Kristie’s Kitchen(cutting boards and splatter screens; founded 2018, operating in NL, UK, Germany and the USA). 
 
In May 2021, Dwarfs announced that in the years ahead it plans to acquire c20 online stores, both domestically and internationally, with revenues ranging from EUR500,000 to EUR20 million. Together with the online kitchen store AMCO, which was acquired in May 2021, the Company’s annual revenue is EUR11 million, following five completed acquisitions. 
 
Dwarfs CEO Demian Beenakker is delighted with the purchase of the promising online stores: “These are relatively young companies with a strong portfolio of niche products in lifestyle and home furnishings. Each of them has grown rapidly in its own way in less than three years and three of the four online stores still operate only in the Netherlands. Our know-how and clout will enable us to help them grow quickly on the international stage and allow the revenues to multiply, while the fourth already operates across multiple geographies.” 
 
Beenakker also says that Dwarfs has revised its growth prospects upwards: “There are many e-commerce companies in operation and we can make acquisitions faster than expected. At the same time, capital markets, especially in the UK and North America, are showing great interest in financing our activities and providing extra capital. On top of this we are really happy with the way our organisation is growing. We have been successful in attracting good people to Dwarfs who will ensure that in the long run, we can integrate the acquired activities effectively and grow them rapidly.”
 
Fabian Chrobog, Founder and Chief Investment Officer at North Wall Capital, adds: “We are pleased to be partnering with Dwarfs, which has significant geographic and sector expertise, to support the Company as it enters the next phase of its development. Our recently launched dedicated e-commerce lending strategy demonstrates the strength of our conviction in the growth potential of this market, working with companies like Dwarfs to capitalise on the ongoing transition of retail sales to online marketplaces.”  

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